Suzuki to setup Rs 1,151 cr lithium-ion battery plant in Gujarat

Suzuki Motor Corporation (SMC) is planning to setup a lithium-ion battery manufacturing project jointly with Toshiba Corporation and Denso with a proposed investment of $180 million (Rs 1,151 crore), at Hansalpur in Gujarat. Suzuki will hold 50 percent, Toshiba 40 percent, and Denso 1 in the new project.

SMC Chairman Osamu Suzuki said, ”The batteries that we are going to manufacture in this plant will be sold in India and exported. This facility is being set up as part of our commitment to Make In India.” He also announced plans to set up a third plant in Gujarat investing Rs 3,800 crore. This would take the net investment in Hansalpur to Rs 13,400 crore.

This is the first time a major OEM is investing to make lithium-ion batteries, which are critical for electric and hybrid vehicles. This would pave the way for making affordable electric powertrain by reducing the battery price. Lithium ion batteries are largely imported, and Maruti itself imports them for its Ciaz hybrid.

Companies like Mahindra & Mahindra, which makes electric vehicles, is now working on its existing vehicles. The government is also promoting the faster adoption and manufacturing of electric vehicles in India (FAME scheme) which has the four focus areas of technology development, demand creation, pilot projects and charging infrastructure.

Meanwhile the Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe together inaugurated Suzuki Motor Gujarat (SMG), the wholly-owned subsidiary of SMCs manufacturing plant for cars and engines in Hansalpur. Maruti Suzuki India Chairman RC Bhargava said, We have already begun to look into the electric car market. Electric cars are planned; however the new models will be based on customer preference, so that we can be present in all the segments to provide better choice for customers.”

The proposed expansion plan of SMG will take its total capacity to 250,000 units a year. SMG commissioned its first plant in February and makes the Baleno cars. Construction of the second plant to produce 500,000 units of powertrain a year has started. It is expected to be commissioned in 2019. With the completion of the second plant, Suzuki’s production capacity in India (Haryana and Gujarat) will be 2 million units, supporting MSIL’s objective of selling 2 million cars a year by 2020.

When the proposed third plant comes on stream, SMG’s capacity will be 750,000 units a year and MS112s 2.25 million. In the long-run, SMG will have an installed capacity of 1.5 million units. With the third plant, it will employ 10,000 people directly and indirectly.